The Medical Channel Corporation v. Security Bank Corporation

Summary

The Supreme Court denied TMCC's petition challenging a writ of possession in favor of Security Bank Corporation over foreclosed properties. TMCC occupied the properties as lessee under an unrecorded lease contract with the original owner Florencio Sarmiento. When Allied Pharmaceutical defaulted on its loan, SBC foreclosed the mortgaged properties and became the highest bidder. After consolidation of titles, SBC sought a writ of possession. TMCC invoked Article 1676 of the Civil Code, arguing SBC should have known of the lease. The Court ruled this raised a pure factual question inappropriate for review on certiorari. As absolute owner post-foreclosure, SBC has superior right to possession over a mere lessee whose occupation was not adverse to the original mortgagor. The decision affirms that unrecorded leases cannot defeat the rights of foreclosing mortgagees absent proof of actual knowledge of the lease.